US non-farm payrolls: Pound up against the dollar as the number of jobs added in the US came in below forecast at 103,000 for March (GBPUSD)
The US created 103,000 jobs last month as growth slowed following a strong February that had trumped expectations.
This time round, the news wasn’t quite so bright, as analysts had been looking for March non-farm payrolls to come in at around 190,000 keeping the six-month average around 186,000.
David Morrison, senior market strategist at GKFX, had said that would paint a “very healthy” picture, with unemployment at 4.1 per cent.
Instead, US job gains were the smallest in six months.
Read more: US job openings smashed expectations last month
Unemployment had been forecast to dip slightly to four per cent, but held steady at 4.1 per cent, the US Bureau of Labor Statistics said today.
Employment increased in manufacturing, health care and mining, while retail trade and construction dipped.
There was a slight pick up in wage growth, with average hourly earnings rising by eight cents to $26.82, so over the year average hourly earnings have risen by 71 cents or 2.7 per cent.
Fiona Cincotta, senior market analyst at City Index, had said a strong reading from the US Labour department’s report “could send the pound tumbling sub $1.39”.
But, the big miss in US non-farm payrolls for March initially sent the pound edging up against the dollar to $1.4031.
It marked a contrast to last month, when it was revealed that the number of new jobs added to the US economy had smashed expectations in February.
The change for February was revised up today, from 313,000 to 326,000, which came up considerably ahead of economists’ expectations of 200,000.
The change in nonfarm payroll employment for January was revised down however, from 239,000 to 176,000, so the employment gains for the two months together were 50,000 down on what had been previously reported.
Despite the big miss of job creation figures today though, markets were unruffled.
Craig Erlam, senior market analyst at Oanda, said:
I think this is a sign that the component of the report that traders are focused on has changed, with average hourly earnings now being of far more interest.
Unemployment is very low and whether that’s 4.1 per cent or four per cent doesn’t make a huge amount of difference, the economy is on a very good trajectory and with the passing of tax reforms, it will get there some time soon.
Kully Samra, UK managing director at Charles Schwab, added:
Risks to growth are rising as trade issues emerge and the Federal Reserve continues its tightening campaign but, for the time being, market fundamentals remain supportive of an ongoing bull market.
Read more: China will fight US “at any cost” after Trump mulls $100bn in extra tariffs